from the video-startups dept

A lot of people seemed to be interpreting my post about the writer's strike a couple of weeks ago as taking the studios' side. That wasn't really my point. I don't know enough about the details of writers' compensations structures to have any opinion about which side is being more unreasonable in the dispute. Rather, my point was that a protracted strike is going to hurt everyone in Hollywood—studios and writers alike. There's a very real risk that a protracted strike will create an opening for outsiders to attract viewers who would otherwise be watching Hollywood fare, and that at the end of the strike a lot of those viewers might never come back. That would hurt the studios the most, obviously, but it wouldn't be good for the writers either.

Two recent stories illustrate the sort of threats Hollywood is facing. First, the New York Times profiles some of the many online video startups that have sprung up in the last couple of years. These sites develop a variety of different types of content and are built on a variety of different business models. Some are producing "webisodes": scripted, episodic video programs. Others are creating low-budget comedy clips to spread virally. For example, this silly clip of Will Farrell arguing with a 2-year-old has apparently racked up nearly 50 million views. At the opposite extreme, TechCrunch reports on Blowtorch, which has raised $50 million in venture capital to launch a new low-budget movie studio. The company plans to produce movies for about $5 million each, and has lined up 600 theaters near college campuses to show their movies. They're planning to solicit short films on their websites, and show the best short films on the big screen before their movies. It is, as TechCrunch puts it, "a movie company that is thinking like a cable channel": providing users with content whenever and whereever they want it, instead of trying to force users to watch content on the studio's schedule.

Now, it should be emphasized that it's far from certain that any given company will succeed. A lot of the content on these sites isn't that great. But with so many companies trying so many different approaches, it seems likely that some of them will create some hits. And if the flow of new content from Hollywood dries up, that's obviously going to create a huge opening for these sites. And once one of these companies creates a loyal following, Hollywood is going to find it awfully difficult to lure them back.